April 14, 2005

City Water Rates on the Rise Again

Less than two years after implementing the city’s first water rate increase in more than a decade, the Memphis City Council voted to implement another cost hike for customers at the April 7th meeting.

The board of aldermen voted 3-0 to implement a new $10 per month “availability” charge for each water meter. In addition, the council approved a 10-percent price increase for water and sewer rates.

“There is no easy way of doing this, but currently we are in the red every month in the water fund,” said Alderman Teresa Skinner.

The council pointed out it had lost roughly $200,000 when rural water switched to Lake Rathbun. Instead of being able to add to needed reserves for maintenance and future repairs, the city had seen its water fund slowly evaporate since 1999 when there was an excess of nearly a quarter million dollars in the fund, which is now empty.

“Our water rates are actually pretty cheap compared to everyone else, as a matter of fact they are too cheap,” said water superintendent Dennis Howard. “If rates had just been raised one or two percent every year over the past 15 years to keep up with rising costs, we wouldn’t be faced with this now.”

The City of Lancaster has a minimum charge of $14.50 per 1,000 gallons with a $7.50 charge per each additional 1,000 gallons used. Sewer cost is $9.00 minimum for the first 1,000 gallons plus $1 per 1,000 gallons after that. Lancaster closed its water plant a year ago and now purchases from Lake Rathbun after funding could not be secured to update the city’s treatment facility.

The City of Kahoka charges a minimum of $7.50 per 2,000 gallons. The cost is $2.65 per 1,000 for additional water up to 8,000 gallons. Anything between 8,000 gallons up to 190,000 gallons used per month and the rate drops to $1.95 per 1,000. Over 200,000 gallons used costs $2.05 per 1,000. Anything beyond 5 million gallons used costs $4.10 per 1,000 gallons. Kahoka sewer charges are $2.40 for the first 2,000 gallons of water plus 99 cents per 1,000 gallons. Like Memphis, Kahoka still maintains its own treatment facility.

The City of Edina charges a minimum of $11 for the first 1,000 gallons and then $5.25 per 1,000 gallons thereafter. The sewer rate is $9.75 for the minimum with $2.50 charges per 1,000 gallons thereafter. Edina also was forced to close its own water plant and now purchases water from the Clarence Cannon water district.

The Scotland County Consolidated Public Water Supply District #1 charges a minimum of $14 for the first 1,000 gallons of water. The charge is $1 per 100 gallons thereafter up to 2,000 gallons. After 2,000 gallons, each additional 100 gallons costs 50 cents.

Over the past several months the aldermen have held work sessions to discuss ways to fix the problem. But after making budget reductions and cutting expenses, the city leaders still could not make ends meet, necessitating a price increase.

Customers had been paying $9 for the first 1,000 gallons of water plus $3 for sewer. The rate then was 41.7 cents per 100 gallons for water plus 15 cents per 100 gallons for sewer, used above and beyond the 1,000 gallon minimum.

Under the new price guidelines, customers will pay the $10 monthly meter charge plus $9.00 for the minimum 1,000 gallons and $3.00 for sewer. The cost per 100 gallons beyond the minimum will raise 10 percent to 45.87 cents plus 16.5 cents for sewer.

Alderman Skinner pointed out that the average customer will only experience an increase in cost of around $13 a month. That is based on the average use of 5,000 gallons, which will now cost customers $46.95 compared to the old cost of $34.68, a hike of $12.27.

However the impact will be more significant for commercial users. One of the city’s largest water customers was on hand to discuss the issue. He pointed out that in 2003 the city raised his water cost by more than 40 percent, meaning he will be looking at a cost hike of more than 50 percent.

The council noted its concern over the impact on businesses but did not offer any solutions for the commercial clients.

The aldermen noted their frustration with the Consolidated Public Water Supply District #1 for switching to Lake Rathbun instead of using the available funding to help build a bigger city water plant that the council felt would have been better for all involved.

When asked why the switch was made the council had no answers and suggested concerned citizens should attend the rural water board meetings to try and get an answer.

“We looked at several price increase scenarios, but the best scenario would be for the county customers to come back,” said one alderman.

The $10 availability charge is expected to go into effect in May or June after the council officially approves the ordinance. The new rate structure, including the 10-percent increase, will take effect with the beginning of the new fiscal year, September 1.

The $10 meter charge is expected to generate more than $120,000 annually. Combined with the rate increase and the cost cutting moves the council made, the aldermen hoped the change would return the water fund to solid financial ground.

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